In response to citizens’ uproar against ISDS throughout Latin America, in 2013, the Ecuadorian government established an audit commission of government officials, academics, lawyers and civil society groups to analyze the costs and benefits of the country’s existing treaties and make recommendations.

On May 8, the government made public the Audit Commission’s 688-page report, which recommended that the government should terminate its remaining treaties and develop an alternative investment treaty model that removes ISDS and rebalances the rights of citizens over corporations.

The Audit Commission reported that the treaties had failed to deliver on promised foreign investment and had, in fact, undermined the development objectives laid out in Ecuador’s constitution. The report found that Ecuador had been forced to pay nearly $1.5 billion to multinational corporations (equivalent to 62 percent of its annual health spending), and that, under currently pending cases, the government runs the risk of having to pay out $13.4 billion (more than half the government’s entire annual budget for 2017).

Worldwide, the tide is turning against the notion that multinational corporations and investors should be granted extraordinary rights and the ability to enforce them against governments in a corporate-rigged, extrajudicial system. Ecuador’s announcement shows that the diverse movement of civil society, legal scholars and government officials concerned about ISDS are making progress in rolling back the regime.

As pressure grows worldwide for governments to withdraw from the ISDS system, the Trump administration has 60 days before it must reveal its position. (Under Fast Track, the administration must publicly post a detailed description of its negotiating plans 60 days after the initial notice.)

Given that ISDS was a key contributor to the U.S. Congress’ opposition to the TPP, it is not surprising that the administration’s NAFTA renegotiation notice was greeted by demands from Congress and civil society that ISDS elimination must be a top priority.

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Eyes on Trade is a blog by the staff of Public Citizen's Global Trade Watch (GTW) division. GTW aims to promote democracy by challenging corporate globalization, arguing that the current globalization model is neither a random inevitability nor "free trade." Eyes on Trade is a space for interested parties to share information about globalization and trade issues, and in particular for us to share our watchdogging insights with you! GTW director Lori Wallach's initial post explains it all.

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